Vedanta Iron & Steel swings back to profit despite weaker operating performance

Vedanta Oil & Gas Q1 output falls 17% as production declines across key fields


Vedanta Iron & Steel Ltd. reported a net profit of ₹121 crore for the June quarter, reversing a loss of ₹1,939 crore in the preceding three months.

Revenue from operations declined 5.2% on a sequential basis to ₹3,662 crore from ₹3,863 crore in the March quarter.

Operating performance weakened during the quarter, with EBITDA falling 8.1% quarter-on-quarter to ₹508 crore from ₹553 crore.

The company’s EBITDA margin stood at 14% in the June quarter, compared with 14.3% in the preceding quarter.

The company said that it’s Pig iron production reached an all-time quarterly high of 291 kilotonnes, up 8% year-on-year.

Iron ore production increased 4% year-on-year to 2.6 million dry metric tonnes, while saleable steel production rose 4% year-on-year and 2% sequentially to 582 kilotonnes.

The Goa pig iron plant also recorded its highest-ever production at 238 kilotonnes, marking a 12% increase from the year-ago period.

Commenting on the performance, CEO and Whole-Time Director Pankaj Kumar Sharma said the company delivered a resilient operational and financial performance during the quarter despite a dynamic market environment.

He said higher iron ore production, record quarterly pig iron output, operational efficiencies across the steel business and continued focus on value-added products supported margin improvement.

Sharma added that the company remains focused on executing its growth projects, improving cost competitiveness and building a sustainable platform for long-term value creation.

Finance cost and interest income

In its investor presentation, company said that finance cost declined 55% year-on-year and 53% quarter-on-quarter, attributing the reduction to the settlement of inter-company payables under the group’s demerger adjustments.

Interest income fell 67% year-on-year and 64% quarter-on-quarter due to the elimination of inter-division receivables under the Vedanta-approved demerger scheme.

Industry outlook

The company said India’s per capita steel consumption stands at 102 kg, significantly below the global average of 215 kg, indicating robust long-term demand potential.

It also noted that with India’s steel production projected to grow at a compound annual growth rate (CAGR) of 8.7%, a supply gap is likely to emerge, creating significant headroom for further expansion in iron ore production.

Shares of Vedanta Iron and Steel Ltd. ended 4.98% higher at ₹30.98 apiece on the NSE on Wednesday, ahead of the company’s June quarter earnings announcement.

Also Read: Eicher Motors Q1 profit rises 21% to ₹1,462 crore, beats estimates



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